ACTION will reimburse sponsors for the reasonable expenses incidental to the defense of part-time volunteers in Federal, state and local civil judicial and administrative proceedings where:
(a) The proceeding arises directly out of the volunteer's performance of activities pursuant to the Act;
(b) The volunteer receives or is eligible to receive compensation, including allowances, stipend, or reimbursement for out-of-pocket expenses under an ACTION grant; and
(c) The conditions specified in paragraphs (b) and (c) in Sec. 1220.3-1 are met.